The ge­og­ra­phy of elec­tions

Financial Mirror (Cyprus) - - FRONT PAGE -

In many coun­tries, where you live tends to be an ac­cu­rate pre­dic­tor of what or whom you are vot­ing for. This was most ev­i­dent in the maps of the elec­toral ge­og­ra­phy of vot­ing for “Leave” and “Re­main” in the United King­dom’s June ref­er­en­dum on Euro­pean Union mem­ber­ship. A sim­i­lar pat­tern can be found in the dis­tri­bu­tion of votes in the 2012 US pres­i­den­tial elec­tion or in French sup­port for Ma­rine Le Pen’s Na­tional Front in the 2015 re­gional elec­tions. It is very likely to be found in the United States’ up­com­ing pres­i­den­tial elec­tion. Many cit­i­zens live in places where a large share of their neigh­bors vote the same way they do.

This vot­ing ge­og­ra­phy is in­dica­tive of a deep eco­nomic, so­cial, and ed­u­ca­tional di­vide. Af­flu­ent cities, where univer­sity grad­u­ates con­cen­trate, tend to vote for in­ter­na­tion­ally-minded, of­ten cen­tre-left can­di­dates, while lower mid­dle-class and work­ing-class dis­tricts tend to vote for tradead­verse can­di­dates, of­ten from the na­tion­al­ist right. It is no ac­ci­dent that may­ors from the cen­tre-left gov­ern New York, Lon­don, Paris, and Ber­lin, whereas smaller, strug­gling cities tend to pre­fer hardright politi­cians.

Re­gional or lo­cal vot­ing pat­terns are as old as democ­racy. What is new is a grow­ing cor­re­la­tion of spa­tial, so­cial, and po­lit­i­cal po­lar­i­sa­tion that is turn­ing fel­low cit­i­zens into near-strangers. As En­rico Moretti of the Univer­sity of Cal­i­for­nia at Berke­ley em­pha­sised in his book The New Ge­og­ra­phy of Jobs, the salience of this new di­vide is un­mis­tak­able: univer­sity grad­u­ates ac­count for half of the to­tal pop­u­la­tion in the most af­flu­ent US met­ro­pol­i­tan ar­eas, but are four times less nu­mer­ous in worse-off ar­eas.

Eco­nomic shocks tend to ex­ac­er­bate this po­lit­i­cal di­vide. Those who hap­pen to live and work in tra­di­tional man­u­fac­tur­ing dis­tricts caught in the tur­moil of glob­al­i­sa­tion are mul­ti­ple losers: their job, their hous­ing wealth, and the for­tunes of their chil­dren and rel­a­tives are all highly cor­re­lated.

In fas­ci­nat­ing new re­search, MIT’s David Au­tor and his co-au­thors have ex­plored the po­lit­i­cal con­se­quences. They find that US dis­tricts where the econ­omy was se­verely hit by Chi­nese ex­ports have re­sponded by re­plac­ing mod­er­ate rep­re­sen­ta­tives with more rad­i­cal politi­cians – ei­ther from the left or the right. Glob­al­i­sa­tion, there­fore, has re­sulted in both eco­nomic and po­lit­i­cal po­lar­i­sa­tion.

For too long, gov­ern­ments have ne­glected this di­vide. Some put faith in trickle-down eco­nom­ics, others in a mon­e­tary-pol­i­cy­driven re­vival of growth and em­ploy­ment, and still others in fis­cal re­dis­tri­bu­tion. But these so­lu­tions have de­liv­ered lit­tle respite.

Ev­i­dence speaks against the naive hope that pros­per­ity will even­tu­ally reach all ar­eas. Mod­ern eco­nomic de­vel­op­ment re­lies heav­ily on in­ter­ac­tions, which in turn re­quire a high den­sity of firms, skills, and in­no­va­tors. It puts a pre­mium on ag­glom­er­a­tion, which is why larger cities tend to thrive, while smaller cities strug­gle. Once an area has started los­ing skills and firms, there is lit­tle hope that the trend will nat­u­rally re­verse. Be­ing with­out a job can quickly be­come the new nor­mal.

Ag­gre­gate de­mand ex­pan­sion hardly al­le­vi­ates the pain. Even if it re­mains true that a ris­ing tide lifts all boats, it does not do so in an even way. For those who feel left out, stronger na­tional growth of­ten means even more pros­per­ity and dy­namism in the bet­ter-off cities, and lit­tle, if any, gain for them­selves – hence a sharper, even more un­bear­able di­vide. Growth it­self has be­come di­vi­sive.

And whereas fis­cal trans­fers help counter in­equal­ity and fight poverty, they do lit­tle to re­pair the so­cial fab­ric. Fur­ther­more, their long-term sus­tain­abil­ity is in­creas­ingly in doubt.

In her in­au­gu­ral ad­dress, Bri­tish Prime Min­is­ter Theresa May com­mit­ted her­self to a “union­ist” ap­proach to the coun­try’s eco­nomic and so­cial woes. US pres­i­den­tial can­di­dates have also re­dis­cov­ered the strength of the de­mand for na­tional and so­cial co­he­sion. Sim­i­lar con­cerns will no doubt be raised in the com­ing French pres­i­den­tial cam­paign. Yet, if the ends are clear, politi­cians are of­ten clue­less about the means.

In the US pres­i­den­tial cam­paign, trade pro­tec­tion is fash­ion­able again. But, while im­port re­stric­tions may al­le­vi­ate the pain of some man­u­fac­tur­ing dis­tricts, they will not pre­vent com­pa­nies from re­lo­cat­ing where growth op­por­tu­ni­ties are the strong­est. They will not pro­tect work­ers from tech­no­log­i­cal change. And they will not recre­ate yes­ter­day’s de­vel­op­ment pat­terns.

Most promi­nently in the UK, but else­where as well, eco­nomic mi­gra­tion is in­creas­ingly be­ing called into ques­tion. But here, too, while re­strict­ing the en­try of East­ern Euro­pean work­ers may al­le­vi­ate wage com­pe­ti­tion or stem the rise in hous­ing prices, it will not change the rel­a­tive fate of small and big cities.

Rather than claim­ing the op­po­site, politi­cians should ac­knowl­edge that there are no quick fixes to the un­even ge­og­ra­phy of mod­ern eco­nomic de­vel­op­ment. In­con­ve­nient as it may be, the rise of the me­trop­o­lis is a fact – one that should not be re­sisted, be­cause it is not a zero-sum game. Big cities do yield ag­gre­gate eco­nomic ben­e­fits.

What pub­lic pol­icy must do is en­sure that eco­nomic ag­glom­er­a­tion does not threaten equal­ity of op­por­tu­nity. Gov­ern­ments can­not de­cide where com­pa­nies lo­cate; but it is their re­spon­si­bil­ity to en­sure that, al­though where you live af­fects your in­come, where you were born does not de­ter­mine your fu­ture. In other words, pub­lic pol­icy has a ma­jor re­spon­si­bil­ity in lim­it­ing the cor­re­la­tion be­tween ge­og­ra­phy and so­cial mo­bil­ity. As Raj Chetty of Stan­ford and others have shown, this is far from be­ing the case in the US, and sim­i­lar pat­terns can be ob­served in other coun­tries.

In­fra­struc­ture can help. Ef­fi­cient trans­porta­tion, qual­ity health ser­vices, and broad­band In­ter­net ac­cess can help smaller cities at­tract in­vest­ment in sec­tors that do not rely on ag­glom­er­a­tion ef­fects. Back-of­fice ser­vices, for ex­am­ple, may have an ad­van­tage in be­ing lo­cated where of­fice space and hous­ing are cheap.

Fi­nally, there is a case for lim­it­ing the self­ish­ness of bet­ter-off ar­eas. The dis­tri­bu­tion of com­pe­tences be­tween na­tional and sub-na­tional lev­els, as well as the struc­ture of tax­a­tion, was de­fined in a very dif­fer­ent en­vi­ron­ment. To mit­i­gate the geo-eco­nomic di­vide, they may have to be rethought fun­da­men­tally.

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